Bear Of The Day: Bojangles'

It isn’t much of a secret that things have been pretty poor for the restaurant industry as of late. Competitive pressures, changing consumer tastes, and a general shift away from the space by investors, have all combined to push the industry lower.

In fact, the restaurant industry is currently in the bottom 15% of all the industries we track, while its sector is in dead last too. If that wasn’t enough, consider that just five of the 55 companies in the restaurant sector have a rank better than ‘hold’ right now.

So, in such a weak environment, which companies do you want to avoid most of all? Well, one that you definitely need to be aware of—and may want to consider staying clear from—is Bojangles’ ((BOJA - Free Report)). This is especially clear when you look at some of the most recent earnings estimates for Bojangles’ stock.

Recent Estimates

Though BOJA has a decent history when it comes to beating earnings estimates, most analyst opinion of the stock lately has been negative, at least when looking at their prospects for earnings. We actually haven’t seen a single estimate go higher for the current quarter, current year, or next year time frames, in the last sixty days.

We have, instead, seen a dramatic decrease in the consensus estimate for BOJA stock. The consensus has declined by almost 20% for the current quarter in the past two months, while the full year has fallen by 10% in the same time frame. Thanks to these shifts, the company is now expected to see earnings contract by 30% year-over-year, while there is a 16% decline projected for the current year too.

Bojangles', Inc. Price and Consensus

 

Bojangles', Inc. Price and Consensus | Bojangles', Inc. Quote

With these kinds of numbers and a weak industry rank, it isn’t looking good for BOJA right now. No wonder we have a Zacks Rank #5 (Strong Sell) on the shares, and are looking for more sluggish trading from the company in the near future.

Other Choices

Though we have noted that the restaurant space is looking quite weak right now, there are still a few gems in this troubled sector. Two that stand out are Domino’s Pizza ((DPZFree Report) ) and Papa John’s Pizza ((PZZA - Free Report) ), as these each have a Zacks Rank #2 (Buy) right now.

Plus, both DPZ and PZZA are expected to post solid EPS growth this year, which is something that the majority of the restaurant world can’t say right now. So, if you are seeking a better choice in the restaurant world, give either of the aforementioned pizza stocks a closer look. Both of these appear to be better positioned than BOJA, at least so long as Bojangles’ struggles to turn things around in the minds’ of analysts from an earnings perspective.

Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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